Determining the fintech readiness of South African banks in promoting financial inclusion

Abstract

Financial inclusion remains a significant socio-economic challenge in South Africa, particularly among underbanked, underserved and rural communities with limited access to formal financial services. Despite advances in digital banking and financial technologies, many South Africans continue to face barriers related to affordability, accessibility, infrastructure and financial literacy. Financial technology (fintech) has emerged as a potential solution to address these challenges by expanding access to financial services through digital innovation, mobile banking platforms and alternative payment systems. The purpose of this study was to assess the fintech readiness of South African banks to promote financial inclusion. Specifically, the study explored whether banks consider fintech a viable solution for enhancing financial inclusion, assessed the availability of technological infrastructure and organisational readiness, and identified the key challenges affecting fintech implementation within the banking sector. The study adopted an interpretivist research philosophy and a qualitative research method. Data were collected through semi-structured interviews with five participants occupying senior and strategic positions within major South African banking institutions. Purposive sampling was employed to select participants directly involved in fintech implementation, digital banking and financial inclusion initiatives. The data were analysed using thematic analysis. The findings revealed that South African banks increasingly recognise fintech as an important enabler of financial inclusion. Participants indicated that fintech improves accessibility, affordability and convenience through innovations such as mobile banking applications, USSD banking, digital onboarding, cardless transactions and digital payment solutions. The study further found that strategic partnerships between banks and fintech companies play a critical role in accelerating innovation and extending customer reach. While banks generally possess the technological infrastructure required to support fintech adoption, challenges such as legacy banking systems, cybersecurity risks, regulatory complexity, digital skills shortages and customer trust concerns continue to affect implementation. Furthermore, customer education and financial literacy were identified as critical factors influencing fintech adoption, particularly within rural and underserved communities. The study concludes that fintech has significant potential to advance financial inclusion in South Africa. However, sustainable implementation requires continued collaboration among banks, fintech firms, regulators and communities. The study recommends increased investment in digital infrastructure, customer education, cybersecurity, regulatory support and strategic fintech partnerships to enhance fintech readiness and promote inclusive financial growth.